Lib Dems in Southwark have warned that social housing tenants in the north of the borough could be faced with rents three times higher than council levels if Government plans to allow social landlords to charge up to 80 per cent of market rate go ahead.
The document is a joint response from Bermondsey and Old Southwark's constituency party and the Liberal Democrat council group for the whole of the borough of Southwark to the coalition government's consultation on social housing tenancies and rent setting which ended on Monday.
"We understand the rationale behind introducing flexibility in rent setting, and the creation of affordable rents," says the document. "However, we have some difficulties with this policy, as drafted.
"We believe that the nomenclature 'affordable rent' is misleading, particularly in areas such as Southwark.
"Weekly market rent in the parts of Southwark including Borough, Bermondsey, London Bridge and Surrey Quays can easily reach £300-£350 per week for a 1-bedroom flat.
"This compares to social rent from the council at £80 per week. A threshold of 80 per cent of market rent in these areas, where there are large amounts of council and housing association stock could be up to £240 per week.
"This is a 300 per cent increase on social rent. While we accept that this is an extreme example, due to the high house prices in central London, it is a relevant example for areas where high and low income families co-exist.
"A so-called "affordable rent" could take into account average wages, and perhaps be capped at a ratio to the average wage.
"This would ensure that housing associations and local authorities did not rent out a large portion of their housing stock to high income families who could afford the 80 per cent threshold. The inevitable conclusion of this would be the gradual removal of low income families from council estates in central London, with negative consequences for social cohesion and mixed communities.
"We also worry about geographical factors in the setting of tenancy agreements. Average rental prices differ widely in Southwark, with very high prices in parts of the north (Borough, London Bridge and Surrey Quays) and south (Dulwich) of the borough and low prices in the centre (Camberwell and Peckham).
"If affordable rents are set relative to the local average rent, then this will lead to higher income families in the north and south of the borough and all the low income families in the centre. We do not wish to live in a socially segregated borough.
"We believe that low income families should be able to remain neighbours of high income families in the north of Southwark.
"Rents should be set bearing in mind the need for low income families to live across the whole borough, including those areas with very high market rents."
The document continues: "We would also ask the government to look at what can be done to regulate rents in the private sector and improve the security of private tenancies.
"In Southwark, private rents are often completely out of the range of affordability and this causes huge pressure on social housing as a result."
Southwark Labour leader Cllr Peter John said: "The Labour Party has been arguing since the Budget last year that making new social tenants pay rents of as much as 80 per cent of market rates is deeply unfair and will hit the poorest hardest.
"We welcome the fact that Southwark Liberal Democrats now recognise this and hope we can work with them to protect new tenants in Southwark – although their comments demonstrate how at odds they are are with their party nationally.
"We also hope that Simon Hughes will use his position within the Government to do everything he can to mitigate the impact of these changes."